News Corp shares soar on Q4 result, Foxtel talks
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More news: News Corp shares rocketed at the start of trading on the ASX after the Murdoch-controlled media group beat estimates for fourth-quarter revenue and revealed talks over a possible sale of Foxtel Group.
Shares were up 8.6% to $44.95 by 10:40am AEST.
What they said: "This is another solid result, and we’d expect News Corp to outperform the market today," E&P Capital analyst Entcho Raykovski said.
"The comments on potential third party interest in Foxtel should also be taken positively."
News Corp boosts Q4 earnings, flags Foxtel sale
The news: News Corp beat estimates for fourth-quarter revenue — driven by growth in its digital real estate services, book publishing and the Dow Jones segments — as it also revealed it is in talks on a possible sale of Foxtel Group.
The numbers: Quarterly revenue was up 6% to USD2.58 billion ($3.91 billion), compared to an estimate of USD2.49 billion, according to LSEG data.
The company's Australian real estate platform REA Group posted revenue of USD305 million in the quarter, an increase of 37% from a year earlier, helped by price increases and a rise in national listings.
Revenue at New Corp's business information unit Dow Jones grew 4%, to USD566 million, driven by growth in circulation and subscription revenues.
Net income for the quarter was USD71 million, a USD103 million increase compared to a net loss of USD32 million in the prior year. The company reported total segment EBITDA of USD380 million, an 11% increase compared to USD341 million in the prior year primarily due to strong contributions from the book publishing segment and REA Group.
The increase was partly offset by Hubbl launch costs at Foxtel Group and lower contributions from its News Media segment and US real estate listing company Move.
Adjusted earnings per share totalled 17 US cents per share compared to 14 US cents in the prior year, and Visible Alpha consensus estimates of 16 US cents.
On a full-year basis, the company notched total revenue of USD10.09 billion, up 2% year on year. Net income for the full year was USD354 million, an 89% compared to the prior year. Total segment EBITDA was up 8% to USD1.54 billion, partly aided by cost savings related to a 5% headcount reduction initiative.
The context: New Corp said Q4 revenue growth was boosted by higher Australian residential revenues at ASX-listed REA Group, higher book sales and lower return rates at its book publishing segment, and continued growth in the professional information business at its Dow Jones segment.
The increase was partly offset by lower advertising, circulation and subscription revenues at its News Media segment, in addition to a USD15 million, or 1%, negative impact from foreign currency fluctuations. Lower revenues at Move were attributed to ongoing challenging housing market conditions in the US.
News Corp chief executive Robert Thomson confirmed in a statement that the company has taken “legal steps” against generative artificial intelligence firms seen to be using the company’s content without compensation, as first reported by Capital Brief last month.
Thomson also flagged a potential sale of Foxtel group, which includes its pay TV platform and streaming services Kayo and Binge, saying there had been third-party interest in a potential transaction.
"We are evaluating options for the business with our advisors in light of that external interest," he said.
Foxtel Group is 65% owned by News Corp and 35% by Telstra.
The source: News Corp earnings release
